Scotland’s Register of Persons Holding a Controlled Interest in Land
We would like to thank Louise Johnston, a Partner at Turcan Connell for this article. Louise is a dual qualified lawyer, and practices in Scotland, England and Wales.
On 1 April 2022, a new register called the Register of Persons Holding a Controlled Interest in Land (“RCI”) came into existence. The RCI is one of a number of initiatives by the Scottish Government with a view to increasing transparency as to who owns and controls land in Scotland. Realising the RCI, will have implications for a number of our clients, we asked one of our professional colleagues, Louise Johnston, a partner at leading law firm Turcan Connell, to outline the key points of the Register’s introduction.
What does the RCI cover?
The RCI will contain details of who exercises significant influence or control over the Titleholder of land (and references to land include any buildings on the land) in Scotland. The “Titleholder” is the party who is named as the owner or tenant of the land in question in the Land Register of Scotland or in the Sasine Register. For the purpose of this article, I will focus on Titleholders who are owners of land, although the RCI also applies to tenants whose lease is registered in the Land Register of Scotland or in the Sasine Register.
Will you need to submit an entry to the RCI?
It is the Titleholder’s duty to provide the required information for the RCI and this must be done where another party has “significant influence or control” over the land in question.
The duty to provide information to the RCI is likely to be particularly relevant for farms, estates and other rural properties, as it is common for those types of properties to be held in trust or partnership structures. Where the Titleholder is not the party who has significant influence or control of the land, then the influencing or controlling party (who is known as an “Associate”) must be disclosed in the RCI. So, for example, if the Land Register of Scotland shows Mrs Farmer as the person who owns the farm, but the reality is that Mrs Farmer is holding title to the farm for the benefit of her farming partnership with Mr Farmer and Jnr Farmer, then an entry in the RCI would be needed in order to record her fellow partners of Mr Farmer and Jnr Farmer as Associates.
Where the Titleholder is an individual and there is a contractual or other arrangement in place which gives another party significant influence or control over the Titleholder’s dealings with the land, then that other party would be an Associate and an RCI entry would require to be submitted. Whether another party has any such significant influence or control will depend on the terms of the contract or arrangement in question, but it is possible that an Option Agreement for, say, a renewables or housing development may be captured by the RCI requirements.
What are the penalties for failing to submit an entry?
There are criminal penalties for non-compliance of a fine up to level 5 of the standard scale, which is currently £5,000. The criminal penalties do not come into force until 1 April 2023, which effectively gives Titleholders a grace period within which to comply with the RCI requirements. However, notices required to be served by the Titleholder on Associates both prior to and after submitting an entry in the RCI, and the required gap between the first of these notices and the submitting of the entry to the RCI means that the first notice needs to be served well in advance of the 1 April deadline.
Are there ongoing duties to keep the RCI up to date?
The Titleholder must ensure that the information in the RCI is up to date. So, for example, if the land is partnership property and a new partner is assumed into the partnership, the Titleholder will need to amend the RCI to reflect that the new partner is an Associate. When a Titleholder sells the property, the Titleholder must notify the RCI to remove their entry. An Associate must continue to ensure that the information in the RCI about the Associate is correct and up to date.
How do I submit an entry?
The RCI is maintained by Registers of Scotland. Entries can be submitted to the RCI by a member of the public (in their capacity as a Titleholder) or by professionals holding a Registers of Scotland online services account with RCI permissions. Turcan Connell hold a Registers of Scotland online services account with RCI permissions and would be happy to deal with RCI registrations, both for existing clients or new clients.
Article by Louise Johnston, a partner at Turcan Connell qualified in Scottish and English & Welsh law
